Deutsche Post CEO Klaus Zumwinkel, the head of Europe’s largest postal service and a powerful member of the establishment, resigned last Friday – reportedly not willingly but under pressure from the government – after the German authorities started investigating him for tax evasion, a melodrama complete with a raid on his office in Bonn and a televised search of his home in a Cologne suburb. An arrest warrant was even issued and Zumwinkel was detained for questioning late last week then released after posting bond.

He reportedly has 12 million euros ($17.5 million) stashed in a bank in tiny Liechtenstein, a tax haven, and is suspected of not paying a million euros in taxes.

Hundred of other well-off Germans are also being investigated and homes, offices and banks around Munich and Frankfurt raided.

Liechtenstein’s LGT Group, the postage stamp-sized principality’s largest bank and owned by its royal family, at first traced the investigation to client data stolen from a subsidiary in 2002, the Wall Street Journal reported. However, the information may or may not be more current.

The German government admitted over the weekend that the Federal Intelligence Service (BND), Germany’s CIA, paid a mysterious informant $7.5 million (five million euros) for a disk containing a pilfered list of the Liechtenstein bank’s customers, calling the money “very well invested,” the paper said.

Der Spiegel says the informant contacted the BND in early 2006 and provided sample data sometime that year.

According to Reuters, the German government is now expecting to collect hundred of millions of euros in back taxes.

The Financial Times, which pointed out that the BND’s remit does not extend to tax evasion, says the list is believed to include the secret account activity of 750 Germans. Reuters puts the number at over a thousand. The government is urging tax evaders to turn themselves in to the authorities to avoid jail time.

As you might imagine Liechtenstein’s royal family is fit to be tied.

Complaining that “Fiscal interests cannot be placed ahead of the rule of law,” Crown Prince Alois said in a press conference Tuesday that LGT would prosecute to protect its clients as much as possible and diplomatic repercussions are distinctly the order of the day. Liechtstein’s prime minister was due in Bonn today to meet with German Chancellor Angela Merkel and her finance minister Peer Steinbrueck.

Steinbrueck, who complained that the “moral damage is considerable,” told reporters last Friday that Zumwinkel, 64, had admitted to evading taxes.

The International Herald tribune dredged up an old interview that Zumwinkel gave to the German mass circulation paper Bild am Sonntag a few years ago in which he said, “You cannot organize a market economy according to purely moral principles, it will go bankrupt. The international market knows no morality.”

Zumwinkel’s contract with Deutsche Post was to have run out this coming November. He was expected to step down then. He is now also expected to resign as chairman of Deutsche Telekom and perhaps from the supervisory board of Lufthansa. He ran Deutsche Post since 1990, seeing it IPO and its state monopoly ostensibly dismantled.

In the statement it issued after the meeting, the board thanked Zumwinkel for his “successful entrepreneurial leadership” and his “outstanding achievements in creating the world’s leading logistics group.”

Appel was in charge of the corporate logistics division and international mail and had cross-divisional responsibility for the post’s hundred largest customers.

Appel will get to figure out what to do about the post’s money-losing problem child DHL, whose US operation – down about $3 billion in the last three years – said last week that it would lay off about 600 people in an attempt to get leaner. Some 21,000 people work for the company in the states.

Appel may also get to take Deutsche Post out of the banking business. There are reports Postbank could be sold to Commerzbank to create a rival to Deutsche Bank, apparently what the current government wants.